Prepared for: The Metropolitan Area Planning Council MAPC 60 Temple Place Boston, MA Attn: Mr. Eric Halvorsen

Transcription

1 MARKET ANALYSIS FOR POTENTIAL TRANSPORTATION-ORIENTED DEVELOPMENT (TOD) AT THE WOLLASTON MBTA STATION QUINCY, MASSACHUSETTS MARCH 15, 2013 Prepared for: The Metropolitan Area Planning Council MAPC 60 Temple Place Boston, MA Attn: Mr. Eric Halvorsen Prepared by: RKG Associates, Inc. Economic, Planning and Real Estate Consultants 634 Central Avenue Dover, New Hampshire Tel: Web: Economic Planning and Real Estate Consultants

2 TABLE OF CONTENTS I. Executive Summary... 1 A. Introduction and Overview... 1 B. Key Findings Location and Site Demographic Indicators Economic Indicators Residential Indicators Office Indicators Pipeline Projects... 4 C. Market Conclusions Residential Office Related Retail Related... 6 II. Baseline Socio-demographics... 7 A. Demographics... 7 B. Labor Force and Unemployment Rate Conclusions... 9 C. Employment and Wage Trends Employment Payroll and Wages Conclusions III. Residential Market Indicators A. Housing Supply, Occupancy and Tenure Trends Permit Data & Average Unit Costs Change in Tax Parcels since Vacant Housing by Type Conclusions B. Owner Household Characteristics and Trends Owner Age Characteristics Owner Household Size and Number of Bedroom Characteristics Owners by Housing Type Owners by Income and Values Owners by Period of Moving Into Unit Conclusions C. For-Sale Market Sales Volume & Median Pricing Trend Sales of Condominiums $250,000+ and Current Listings Select Condominium Sales Activity Conclusions RKG Associates, Inc. Page i

3 D. Renter Household Characteristics and Trends Renter Age Characteristics Renter Household Size and Number of Bedroom Characteristics Renter Households by Housing Type Renter Households by Income and Monthly Rents Renter Households by Move in Period Conclusions E. Select Rental Apartment Activity Conclusions IV. Other Market Indicators A. Major Projects in Quincy...33 B. Other Residential/Mixed-Use Projects...34 C. Office Market Conditions Quincy and Greater Boston Office Market Available Office Space Conclusions D. Retail Potential...36 V. Market Conclusions A. Forecasted Annual Household Demand ( ) Affordability of Owning and Renting Annual Demand for Units by Price Range and Conclusions VI. Appendix A. Additional Information Land Value Consideration Construction Costs B. Case Studies Concord, MA Canton, MA Salem, MA Framingham, MA RKG Associates, Inc. Page ii

4 I. EXECUTIVE SUMMARY A. Introduction and Overview RKG Associates, Inc., (RKG), was retained by the Metropolitan Area Planning Council (MAPC) of Boston, Massachusetts, to assist in providing an overview of the existing market indicators that could affect the potential for transit oriented development (TOD) at the Wollaston MBTA station in Quincy, Massachusetts. As defined by the MAPC, the Wollaston business district is bounded by Newport Avenue, Hancock Street, Wayland Street and Wentworth Street as presented in Map I-1. Map I-1 Aerial View of Wollaston Business District Quincy, Massachusetts Specifically, this analysis provides a framework of baseline market conditions that could impact the potential development of the surface parking area (approximately 5½ acres) into a mixed-use development, primarily focused on residential opportunities, with the understanding that potential retail and other spin-off development may occur nearby (refer to Map I-2 for a broader view of the study and comparative area in this analysis). RKG Associates, Inc. Page 1

5 TOD Market Analysis Wollaston Station Quincy, Massachusetts March 15, 2013 Map I-2 Wollaston Station study area, ¼ mile radius and census tract B. Key Findings The key findings of the market analysis are summarized below and are presented in more detail and specifics elsewhere in the report. 1. Location and Site The City of Quincy is located about 10 miles south of downtown Boston at the interchange between State Routes 3 and 128. The Massachusetts Bay Transportation Authority (MBTA) provides subway and commuter rail services to four stations in Quincy, Figure I-1 MBTA Commuter Lot namely, North Quincy, Wollaston, Quincy Center and Quincy Adams. The Wollaston Station is located in a primarily residential neighborhood between Hancock Street and Newport Avenue, the former being a major commercial corridor while the latter serves more RKG Associates, Inc. Page 2

6 as a by-pass that parallels the railroad tracks. The Wollaston Station is in walking distance of many commercial and retail establishments along Hancock Street, mostly smaller and presumed to be independently owned; however, there is a chain drug store nearby. In-field observations indicated that vacancy was nominal among street-level commercial storefronts. 2. Demographic Indicators The population in the ¼-mile radius and Quincy increased since 2000 and its growth is projected to continue through While the total population within the ¼-mile radius (at 3,150) accounts for slightly more than 3% of the total city population, persons of Asian heritage account for more than 6%, with nearly one-half of this population identified as of Asian heritage. With respect to average household income, despite a nominally lesser projected growth rate for the ¼-mile radius, the average income somewhat exceeds that for the city (in 2012) at $84,450 versus $83, Economic Indicators Unemployment in Quincy has continued to decline since its peak in 2009/2010 and was less than 6% in Overall, the total labor force in Quincy has increased and as a result of declining unemployment, the 2012 employment in Quincy recovered from the low in 2008, but is only 300 employees more than it was in The 2011 average weekly wage in Quincy, for all industry sectors, was $1,055, which was less than that for either the county or the state and barely kept pace with inflation since The Quincy average weekly wage in some industry sectors, including education and arts/entertainment, actually declined between 2008 and 2011, made all the more notable as these were two of but only a handful of industry sectors in Quincy where employment increased over the same time. 4. Residential Indicators Housing in the study area realized a net decrease of 41 units (-2%) between 2000 and 2010, with occupied housing decreasing by 105 units and vacant housing increasing by 64 units. A small shift in tenure occurred with owner-occupancy (up) at 55% in 2010, while the renter occupancy rate decreased to less than 45%. By contrast, Quincy experienced a net gain of 2,745 housing units (7%) over the last decade. Quincy captured 43% of the increase in Asian households in the county over the last decade and as a result, 17% of total households in the city had an Asian householder as compared to 22% in the study area. In terms of population and housing change, the representation of the Asian population is greater in the study area and the gains in this housing sector somewhat offset the losses in the study area. Most of the increase in Quincy housing over the last decade was from condominiums, either from conversion or new developments, as well as larger apartment complexes. Two major TOD apartment buildings were developed in Quincy Center, namely Munroe Place (111 units) and Ten Faxon (200 units). Another recently built project is Neponset Landing (280 units), located on the water and in proximity to the North Quincy T station. a) Owner Households Over the last decade in Quincy, all the growth occurred in baby-boom householders (age 45-64), while the number of younger and elderly householders declined. In 2010, owners represented 55% of total households in the study area and 49% in Quincy. The baby-boom owners accounted for 25% of total households in the study area. The annual owner turnover RKG Associates, Inc. Page 3

7 rate averaged about 3% over the last decade in the study area and 4% citywide, approximating 40 owners per year in the study area moved into housing and over 700 citywide (excluding growth). In summary, owners in the study area have dynamic and diverse characteristics with relatively high incomes, larger homes in relationship to the average household size and a higher concentration living in single-unit structures than in larger multi-unit structures. b) Renter Households Renters in the study area represented about 45% of total households in 2010, as compared to 52% citywide, and in both instances, nearly all the household growth occurred in the babyboom generation, offsetting losses in elderly and younger households. The Wollaston Station study area had a higher concentration of renters living in 2-to-4 family structures than in large multi-unit structures (the reverse of the city). Median renter income ($43,100) in the study area was 3% lower than citywide and 45% lower than the median owner income ($78,900) in the study area. Apartment units with rents of $1,000 or more doubled in the study area (citywide the increase was triple). Renter turnover in the Wollaston Station study area and the city averaged about 8% per year over the last decade, amounting to 1,540 renter households citywide annually and 70 renter households annually in the study area. 5. Office Indicators As of year-end 2012, Quincy had an office supply of 4.4 million SF and a vacancy rate of 20.2% indicating a vacant supply of 887,000 SF. Absorption was positive in Quincy for the first time in three or more years. However, the amount absorbed over the last year (50,000± SF) equates to less than 6% of the vacant office space available. Most of the available space was either in Quincy Center (288,400 SF) or North Quincy (211,500 SF), and the least amount of available space was in the Wollaston neighborhood. The overall range in asking lease rates rent was from $7.50/SF to $62/SF in the city and 12/SF to $34/SF in Wollaston. 6. Pipeline Projects A summary of potentially competitive major mixed-use developments, either underway or planned, to any potential development of the Wollaston Station in Quincy are presented next. a) Quincy Center and Related Projects The proposed mixed-use redevelopment of Quincy Center would total nearly $1.6 billion in public and private investment and include approximately 3.3 million SF of new development within a nine-block area of downtown Quincy. At full build-out (2020) 1.1 million SF of new office space would be developed including two high-rise buildings, over 0.6 million SF of new retail, restaurant, cinema, health club and hotel space, plus over 1,400 new residential units and new public parking garages. A portion of the first phase includes 300 units with construction proposed in the spring of 2013 and completion by the summer of The Boardwalk Residences at Marina Bay is another major proposed project in Quincy (under review by the Planning Board) to include a 382-unit residential project in North Quincy, the combined 1,700± units nearly equals the city s net household gain over the last decade. RKG Associates, Inc. Page 4

8 b) University Station in Westwood At University Station, over 1.3 million SF of retail/commercial space is proposed along with 1.5 million SF of office/r & D space and up to 1,000 residential units. Construction has not started and the project may be resized in the future. c) Southfield in South Weymouth Southfield is the redevelopment of the former South Weymouth Naval Air Station, and according to the master plan it will consist of 2 million SF of office/r & D space, including a proposed movie studio, 200,000 SF of community and local retail and a mix of 2,855 housing units. The US Navy transferred the remaining land to the redevelopment authority/master developer and construction is underway for 500± housing units, including apartments (225 units), a senior living facility (220 units) and single-family townhomes. A major recreational complex with an 18-hole golf course is planned at Southfield. d) Selected Projects elsewhere in the Boston Metro Other competitive supply issues include the 7,000 housing units proposed, underconstruction and/or in the approval pipeline in the City of Boston. Also, the former 318-unit Residences at Union Station near the Braintree T-station has been resurrected and new 1- bedroom, 955 SF condominiums are being marketed in the mid-$200,000 range ($250/SF); new 2-bedroom, 1,470 SF units are being marketed in the mid-$300,000 range ($230/SF). C. Market Conclusions Based on the research and findings in this analysis, the following reflects RKG s opinion regarding development potential and considerations for the Wollaston Station study area. The market findings, inputs and assumptions which are the basis of these conclusions are presented in greater detail elsewhere in this report. 1. Residential RKG estimates that annual demand (2012 to 2017) for new housing in Quincy would be 2,560 households per year, of which 12% would be new growth and the remainder a result of turnover. Annual demand for for-sale housing is estimated at 940 units and for rental housing at over 1,600 units. Based on trends in permit data in relationship to household growth over the last decade, RKG estimates new housing would represent about 10% of annual demand, resulting in an average of 90 owner units and 160 renter units, or a total of 250± new units per year. While conditions in the for-sale condominium market in Quincy are improving, as sales in 2012 were higher than in 2011, the median prices of recent activity have appeared to stabilize in the $250/SF range, which may be below the level to support new construction at this time. a) Owner Assuming that 10% of owner demand would be channeled to new construction, most of that would likely be targeted for households earning $100,000 or more, and it is unlikely that any proposed development at the Wollaston Station in the near future could attain an average unit value over $400,000, but would more likely be in the mid-$200,000 to mid-$300,000 range, as housing at this site would lack certain competitive attributes such as a water location and/or views associated with the higher value owner units elsewhere in Quincy. In addition, RKG Associates, Inc. Page 5

9 annual demand in the $60,000 to $99,999 income range for new construction, or 10 to 15 households citywide, would not support sell-out of a major condominium project in this price range, although smaller scale development (and conversions) might be supported. b) Renter Over the next five years RKG estimates that approximately 59% of apartment demand would come from households earning less than $60,000 and these households could afford rents of up to $1,500 per month. Approximately 34% of annual renter demand would come from households younger than age 35, and 57% of that demand could afford rents of $1,875 or higher. As identified from the sampled inventory of existing apartment complexes in Quincy and with proximity to the Wollaston Station, in order to remain competitive any potential new offering would require lease rates in the $1,750/month (1-bedroom) to $2,070/month (2- bedroom) range. Both of these rates are affordable to the renter householder earning $75,000 or more. In absolute terms, demand from all households earning $75,000 or more equals 530 units per year, likely targeted to the 35 and under cohort. In RKG s opinion, any new project would have to capture 20% to 40% of this demand in order to ensure lease-up within a timely fashion, which would equate to 100 to 200 units per year. In RKG s opinion, there appears to be modest support for new rental housing in the study area. However, development of a project on the MBTA site(s) at Wollaston Station may not yield a sufficient premium (assuming a mid-rise building) to support anticipated acquisition costs coupled with providing any replacement parking that the MBTA may require. In conclusion, while rental demand is apparent for a project at this location, issues associated with obtaining the site from the MBTA, such as acquisition cost and replacement parking, and zoning such as 6-story limit, may make such a project infeasible over the near term. Similarly, the costs of assembling sufficient private land near the station (because it is essentially built-out and occupied), may also make redevelopment infeasible. 2. Office Related The location of the Wollaston Station makes it somewhat challenging for office reuse, since most of the available supply in Quincy was either in North Quincy or Quincy Center, as well as in the suburban office parks on the western and southern edge of the city. In addition, another 1 million SF of office space is proposed for downtown Quincy as part of the Street- Works/Beal Company redevelopment. With the exception of any specific end-user, in RKG s opinion the likelihood of office development is weak for the near-term. 3. Retail Related Considering an interior location of the Wollaston T-station, and limited visibility to vehicular traffic, the opportunities for any significant retail development on-site are considered to be limited, other than those that may be convenience oriented for commuters or residents. However, the addition of residents would equate to new consumer spending demand which in turn could translate into a demand for new retail development along Hancock Street or in close proximity. RKG estimates that a hypothetical 500 new households could result in an average annual spending demand of nearly $14 million across selected merchandise lines. This spending demand in turn could support 37,650 SF of retail, noting that it is likely that much of the spending would be captured by existing merchants while some portion could support new development, particularly if a void exists in the immediate vicinity. RKG Associates, Inc. Page 6

10 II. BASELINE SOCIO-DEMOGRAPHICS This chapter presents selected baseline and projected socio-demographics for the Wollaston Station study area, Quincy and other appropriate comparative geographic areas. A. Demographics As indicated in Table II-1, both the ¼-mile radius and the City of Quincy have increased in population since 2000 and continued growth is projected to 2017, although the projected rate of growth for the City of Quincy exceeds that for the ¼-mile radius. The smaller area, also in terms of population, consistently accounts for slightly more than 3% of the City of Quincy. However, the ¼-mile radius has exhibited a significant increase in population diversification, noting growth in the number of persons of Asian heritage, well ahead of the city. The representation of the Asian population in the study area, relative to the city, is nearly double that of the population as a whole. With respect to average household income, despite a nominally lesser projected growth rate for the ¼-mile radius, the average income somewhat exceeds that for the city, as do average household consumer spending demands for Table II-1 Selected Demographic Characteristics Selected Characteristics 1/4 mile radius City of Quincy Radius as % of City Population ,924 86, % ,153 93, % ,160 94, % % chge % 1.58% % Asian Heritage % 15.4% 4.62% % 24.5% 6.70% % 24.9% 6.56% % chge % 3.40% Avg HH $ Income 2000 NA $58,699 NA 2010 $80,361 $79, % 2012 $84,448 $83, % 2017 $93,485 $92, % % chge % 11.02% Avg HH $ 2012 Food at Home $3,906 $3, % Food away Home $3,544 $3, % Apparel $2,328 $2, % Gifts $587 $ % Source : DemographicsNow and RKG Associates, Inc. B. Labor Force and Unemployment Rate This section presents an overview of the labor force, employment and unemployment trends for Quincy, comparing them with Norfolk County and Massachusetts as a whole. As indicated in Figure II-1, the trend in the Quincy unemployment rate has more or less mirrored that for Norfolk County and Massachusetts, albeit slightly greater than the former and more consistent with the state. RKG Associates, Inc. Page 7

11 9.00 Comparative Unemployment Rates City of Quincy Norfolk County Massachusetts Figure II-1 Comparative Unemployment Rates In all three locations the unemployment rate declined after the early recessionary period of the decade, but began to increase with the 2008 economic crises and recovered (resume declining) in 2011 as indicated in Table II-2. Over this 12-year span, the average unemployment rate for Quincy was approximately 5.7%, slightly less than the Massachusetts average of 5.8% but greater than the county average of 5.1%. Table II-2 Comparative Unemployment Rates Unemployment Rate City of Quincy Norfolk County Massachusetts Source : MA Department of Labor and RKG Associates, Inc. Over the 2001 to 2012 period, despite fluctuating unemployment, Quincy typically added to its overall labor force when compared to the prior year, as presented in Figure II-2. Over the 12-year period the average Quincy labor force was 51,800 persons, accounting for 14.4% of the Norfolk County average of 358,600 persons. In terms of increases in actual employment, as indicated in Table II-3, employment in Quincy in 2012 is nearly 2.2% than in 2008 and about 300 employees greater than in 2001, a growth of less than 0.5% since In contrast, the 2012 level of employment in both Norfolk County and Massachusetts is less than it was in 2001, by 0.8% and 1.2%, respectively. 3.00% Percent Change in Labor Force 2.00% 1.00% 0.00% 1.00% 2.00% City of Quincy Norfolk County Massachusetts Figure II-2 Comparative % Change in Labor Force RKG Associates, Inc. Page 8

12 Table II-3 Comparative Employment Change Employment City of Quincy 49,688 48,860 49, % 2.15% 0.45% Norfolk County 348, , , % 1.17% 0.73% Massachusetts 3,275,350 3,277,183 3,236, % 1.24% 1.19% Source : MA Department of Labor and RKG Associates, Inc. 1. Conclusions The unemployment rate in Quincy has continued to decline since its peak in 2009/2010 and was less than 6% in Overall, the total labor force in Quincy has generally increased and as a result of declining unemployment, the 2012 employment in Quincy has recovered from the lows of the economic crises in 2008 and is marginally above the 2001 level by about 300 employees. C. Employment and Wage Trends This section presents an overview of changes in the number of employees and wages, by industry, for the City of Quincy, Norfolk County and Massachusetts 1. Historic and trend line changes in employment and wages may be indicative of future demands, if any, for additional office and/or other non-residential development. 1. Employment Total employment in Quincy increased during the 2001 to 2008 period, as indicated in Table II-4, dissimilar to the declines in Norfolk County and Massachusetts. All areas realized a loss in total employment between 2008 and 2011, although the percent decline in Quincy was the steepest. Despite an overall decline in employment in Quincy, across all sectors between 2008 and 20011, there were several sectors that realized an increase in employment notable among these were construction (12.7%), education (30.7%), retail trade (10%) and arts/entertainment (13.9%). None of the industry sectors either in the county or the state experienced a double digit percent increase in employment between 2008 and 2011, although several experienced a double digit percent decrease. In terms of industry sectors that could equate to a demand for business or office space use, the information sector, education sector and real estate sector all increased in Quincy between 2008 and Payroll and Wages Between 2001 and 2008 the average weekly wage for all industry sectors in Quincy increased by less than $200, or 14.2%, well below the 21.6% inflation rate (refer to Table II-5). Inflation from 2008 to 2011 was approximately 4.5% and Quincy realized a 4.8% (or $50) increase in average weekly wages. By contrast, in both periods in Massachusetts, the change in the average weekly wage exceeded inflation. During the 2008 to 2011 period there were several industry sectors in Quincy where the average weekly wage declined (regardless of inflation) including wholesale trade, transportation, education (which realized an increase in employment) and arts/entertainment (which also realized an increase in employment). Some 1 This information reflects employer reported data for those subject to unemployment compensation, and as a result differs from the previous section reflecting labor force characteristics. RKG Associates, Inc. Page 9

13 industry sectors in Norfolk County experienced a decline in average weekly wage while no sectors in Massachusetts experienced such a drop. Table II-4: Employment by Industry Sector for Selected Years CITY OF QUINCY NORFOLK COUNTY MASSACHUSETTS % % Industry/Building Type Chg 2011 Chg % Chg 2011 % Chg % Chg 2011 % Chg Total Employment, All Industries 47,299 47, % 45, % 327, , % 316, % 3,276,103 3,245, % 3,191, % 23 Construction 2,122 1, % 1, % 19,525 19, % 16, % 151, , % 121, % Manufacturing % % 32,747 24, % 21, % 389, , % 254, % 42 Wholesale Trade 849 1, % 1, % 19,054 18, % 16, % 141, , % 123, % Transportation and Warehousing 1, % % 10,092 7, % 7, % 113, , % 96, % Industrial/Warehouse Buildings 5,111 4, % 4, % 81,418 69, % 61, % 794, , % 595, % 51 Information 2,176 2, % 2, % 12,636 12, % 10, % 117,751 95, % 89, % 52 Finance and Insurance 14,664 12, % 10, % 29,257 26, % 22, % 183, , % 168, % 53 Real Estate and Rental and Leasing % % 5,750 5, % 5, % 44,899 42, % 40, % 54 Professional and Technical Services 2,016 2, % 2, % 18,791 21, % 20, % 247, , % 261, % 55 Mgmt. of Companies & Enterprises 2,205 2, % 1, % 10,841 10, % 8, % 71,925 61, % 58, % 56 Administrative and Waste Services 2,174 2, % 2, % 15,904 16, % 15, % 170, , % 163, % 61 Educational Services 1,650 1, % 2, % 24,007 26, % 28, % 294, , % 326, % 62 Health Care and Social Assistance 5,785 6, % 6, % 38,212 41, % 44, % 429, , % 531, % Office/Institutional Buildings 31,324 30, % 28, % 155, , % 156, % 1,560,580 1,629, % 1,638, % Retail Trade 4,308 3, % 3, % 42,026 40, % 41, % 359, , % 343, % 71 Arts, Entertainment, and Recreation % % 4,502 6, % 7, % 46,961 54, % 54, % 72 Accommodation and Food Services 3,102 3, % 3, % 21,798 23, % 25, % 237, , % 266, % 81 Other Services, Ex. Public Admin 1,920 4, % 4, % 11,345 14, % 14, % 113, , % 137, % Retail/Commercial & Other Buildings 9,618 11, % 11, % 79,671 84, % 88, % 757, , % 801, % 92 Public Administration Govt. Buildings 1,229 1, % 1, % 9,590 9, % 9, % 140, , % 133, % Source: MA EOLWD (ES 202) & RKG Associates, Inc. Table II-5: Average Weekly Wage by Industry Sector for Selected Years CITY OF QUINCY NORFOLK COUNTY MASSACHUSETTS % % Industry/Building Type Chg 2011 Chg % Chg 2011 % Chg % Chg 2011 % Chg AVG Weekly Wage: All Industries $882 $1, % $1, % $849 $1, % $1, % $865 $1, % $1, % 23 Construction $1,065 $1, % $1, % $1,050 $1, % $1, % $963 $1, % $1, % Manufacturing $867 $1, % $1, % $1,106 $1, % $1, % $1,047 $1, % $1, % 42 Wholesale Trade $850 $1, % $1, % $1,188 $1, % $1, % $1,190 $1, % $1, % Transportation and Warehousing $1,022 $1, % $1, % $707 $ % $ % $750 $ % $ % 51 Information $941 $1, % $1, % $1,046 $1, % $1, % $1,244 $1, % $1, % 52 Finance and Insurance $1,203 $1, % $1, % $1,249 $1, % $1, % $1,682 $2, % $2, % 53 Real Estate and Rental and Leasing $785 $ % $ % $787 $ % $1, % $831 $1, % $1, % 54 Professional and Technical Services $1,166 $1, % $1, % $1,262 $1, % $1, % $1,428 $1, % $1, % 55 Mgmt. of Companies & Enterprises $1,442 $1, % $2, % $1,346 $1, % $1, % $1,280 $1, % $2, % 56 Administrative and Waste Services $416 $ % $ % $615 $ % $ % $585 $ % $ % 61 Educational Services $836 $ % $ % $677 $ % $ % $741 $ % $1, % 62 Health Care and Social Assistance $595 $ % $ % $658 $ % $1, % $698 $ % $1, % Retail Trade $519 $ % $ % $534 $ % $ % $477 $ % $ % 71 Arts, Entertainment, and Recreation $438 $ % $ % $701 $ % $ % $530 $ % $ % 72 Accommodation and Food Services $287 $ % $ % $296 $ % $ % $311 $ % $ % 81 Other Services, Ex. Public Admin $390 $ % $ % $510 $ % $ % $477 $ % $ % 92 Public Administration $1,014 $1, % $1, % $903 $1, % $1, % $861 $1, % $1, % Source: MA EOLWD (ES 202) & RKG Associates, Inc. less than inflation 21.6% and 4.5%, respectively for 2001 to 2008 and 2008 to Conclusions The 2011 average weekly wage in Quincy, for all industry sectors, was $1,055, which was less than that for either Norfolk County or the state and barely kept pace with inflation since The Quincy average weekly wage in some industry sectors, including education and arts/entertainment, actually declined between 2008 and 2011, made all the more notable as these were two of but only a handful of industry sectors in Quincy where employment increased over the same time. RKG Associates, Inc. Page 10

14 III. RESIDENTIAL MARKET INDICATORS This chapter identifies trends in the housing supply in the Wollaston Station study area and the City of Quincy. Key characteristics of owner households are analyzed as well as conditions in the for-sale market. Then, trends in renter households are identified and current conditions in the rental market. A. Housing Supply, Occupancy and Tenure Trends Total housing in the Wollaston Station study area (census tract ) experienced a net decrease of 41 units (-1.9%) between 2000 and 2010, while occupied housing decreased by 105 units (-5%), as shown in Table III-1. Vacant units, however, increased by over 64 units, resulting in a higher vacancy rate (4.5%) in A small shift in tenure occurred as owner households declined by 41 units while renter households declined by 64 units. As a result, the owner occupancy rate increased slightly to 55% in 2010, while the renter occupancy rate decreased to less than 45%. Offsetting some of the declines in owner and renter households over the last decade was an increase in Asian households, and combined Asian households represented approximately 22% of total households in the study area in Table III-1 Quincy and Comparative Areas: Housing Supply Statistics [1] CENSUS TRACT # % Total Housing Units 2,143 2,102 (41) 1.9% 100.0% 100.0% Occupied Units 2,112 2,007 (105) 5.0% 98.6% 95.5% Owner Households 1,151 1,110 (41) 3.6% 54.5% 55.3% Asian Owners % 8.9% 14.6% Renter Households (64) 6.7% 45.5% 44.7% Asian Renters % 3.3% 7.6% Vacant Units % 1.4% 4.5% QUINCY, MA # % Total Housing Units 40,093 42,838 2, % 100.0% 100.0% Occupied Units 38,883 40,658 1, % 97.0% 94.9% Owner Households 19,081 19, % 49.1% 48.0% Asian Owners 2,175 3,669 1,494 69% 5.6% 9.0% Renter Households 19,802 21,161 1, % 50.9% 52.0% Asian Renters 1,870 3,331 1,461 78% 4.8% 8.2% Vacant Units 1,210 2, % 3.0% 5.1% NORFOLK COUNTY # % Total Housing Units 255, ,359 15, % 100.0% 100.0% Occupied Units 248, ,914 9, % 97.5% 95.4% Owner Households 173, ,369 5, % 69.7% 69.2% Asian Owners 6,150 10,781 4,631 75% 2.5% 4.2% Renter Households 75,485 79,545 4, % 30.3% 30.8% Asian Renters 4,923 7,166 2,243 46% 2.0% 2.8% Vacant Units 6,327 12,445 6, % 2.5% 4.6% [1] Owner and Renter households as % of Occupied Units, only Source: US Census & RKG Associates, Inc. The City of Quincy experienced a net gain of 2,745 housing units (6.8%) over the last decade while occupied units increased by 1,775 units, of which 23% were owners and 77% renters. The ownership rate decreased to 48% in 2010 while the renter rate increased to 52%. The number of vacant units also increased by 970 over the last decade and the overall vacancy rate increased to over 5% citywide in Asian owners increased by over 1,490 households over the last decade while Asian renters increased by 1,460 households and RKG Associates, Inc. Page 11

15 combined represented about 17% of total households in the City in The City of Quincy captured about 43% of the increase in Asian households in Norfolk County over the last decade. Referring to Table III-1, total housing in Norfolk County increased by 15,205 units (6%) over the last decade, indicating Quincy captured 18% of the county s growth in housing, slightly higher than its 16% share of total housing in However, occupied units in Norfolk County increased by only 9,090 units while vacant units increased by over 6,100 units, causing the vacancy rate to increase to 4.6% in Approximately 55% of the increase in occupied units was owners and the remaining 45% renters. As a result, the ownership rate slipped to 69.2% while the renter-occupied rate increased marginally to 30.8% in As shown above, the tenure characteristics in the census tract with Wollaston Station (55%/45%) were closer to the City overall (52%/48%) than to Norfolk County (69%/31%). 1. Permit Data & Average Unit Costs As shown in Table III-2, building permit data indicated that over 2,200 units were reportedly permitted over the last decade in the City of Quincy, which represents approximately 80% of the net increase in housing during this period. A total of 14,535 units were reportedly permitted in Norfolk County and accounted for 96% of the net increase in housing over the last decade. These differences suggest that additional gains in housing resulted from units permitted prior to 2000, which came on-line during the past decade. Table III-2 Quincy & Norfolk County: Units from Building Permits Number of Reported Units by Year and Type CITY OF QUINCY NORFOLK CO Single 2 to 4 5 unit or Total Single unit or Total Year Family Family more Units Family Family more Units , , , , ,059 1, ,343 2, , , , , Subtotal ,705 2,209 7, ,834 14, , Subtotal , ,229 2,615 Source: US Census and RKG Associates, Inc. Referring to Table III-2, permit activity in Quincy was much higher between 2000 and 2004 as 2,080 units were permitted in these five years, equating to 94% of total units permitted over the last decade. Activity was also high in Norfolk County during the first five years of the last decade as 59% of total permitted units were issued. Reported activity in Quincy slowed dramatically after 2004 and a slowdown also occurred in the county, but not to the same extent. RKG Associates, Inc. Page 12

16 Table III-3 exhibits the average construction cost per unit based on the reported permit data. As indicated, the average cost for single-family units was $131,900 in Quincy over the last decade as compared to $270,460 in Norfolk County. The average cost for multi-family units was relatively similar between the two geographies. Table III-3 Quincy & Norfolk County: Average Residential Construction Costs Average Unit Cost by Year and Type CITY OF QUINCY NORFOLK CO Year Single Family 2 to 4 Family 5 unit or more Total Units Single Family 2 4 Family 5 unit or more Total Units 2000 $128,769 $70,000 $78,815 $85,324 $221,410 $88,222 $99,199 $183, $107,229 $111,178 $97,121 $103,137 $212,358 $99,590 $71,725 $157, $119,600 $122,501 $121,817 $222,185 $122,591 $105,542 $183, $169,374 $147,948 $112,433 $114,713 $251,393 $137,199 $119,534 $174, $144,142 $125,000 $90,309 $98,479 $258,150 $137,867 $96,654 $156, $148,831 $100,000 $146,708 $290,965 $115,134 $99,913 $224, $147,310 $147,310 $330,180 $118,975 $114,261 $223, $156,681 $156,681 $354,991 $134,415 $113,162 $224, $162,158 $162,158 $433,682 $141,980 $93,182 $197, $220,526 $220,526 $314,006 $169,493 $101,143 $180,837 Subtotal $131,882 $128,096 $101,294 $108,199 $270,461 $122,830 $101,812 $186, $215,662 $215,662 $330,225 $108,189 $89,921 $179, $192,000 $192,000 $337,400 $178,504 $98,409 $217, $344,479 $130,400 $101,677 $266,935 Subtotal $213,842 $213,842 $337,674 $120,174 $94,712 $214,421 Source: US Census and RKG Associates, Inc. 2. Change in Tax Parcels since 2000 Another way to measure the increase in single-family homes and condominiums is to review changes in the number of tax parcels over the last decade from data obtained from the Massachusetts Division of Local Services. As shown in Table III-4, the City of Quincy had 13,661 single-family parcels in 2012 (January) which was 79 parcels more than in There were another 5,942 condominium parcels in 2012 which was 1,708 parcels more than in The two types combined (1,787 parcels) is fairly similar to the net increase in occupied housing (1,775 households) in Quincy over the last decade, according to US Census data. Offsetting these gains was a decline in the number of two and three family parcels over this period. A small increase in the number of apartment parcels also occurred. In many cases, the loss of multi-family parcels resulted in conversions of properties to condominiums. RKG Associates, Inc. Page 13

17 Table III-4 City of Quincy: Change in Residential Tax Parcels In short, most of the increase in housing over the last decade was from condominiums, either from conversion or new developments, as well as larger apartment complexes. Two major TOD apartment buildings were developed in Quincy Center, namely Munroe Place (111 units) and Ten Faxon (200 units). Another recently built project is Neponset Landing (280 units), located on the water and in proximity to the North Quincy T station. 3. Single Family Condominiums 2 & 3 Family Vacant Housing by Type 4 units & up Year Parcels in ,582 4,234 3, Change in Parcels by Year (3) (1) (1) (134) (16) (4) (12) (10) (9) (8) (2) 2009 (6) 40 (4) 0 Subtotal 53 1,616 (39) (8) (8) (11) 2 Subtotal (13) (3) Parcels in ,661 5,942 3, Change from ,708 (52) 1 Source: MA DLS & RKG Associates, Inc. The Wollaston Station census tract had 95 units classified as vacant in 2010, which reflected an increase of 64 units since 2000, despite the decline of housing over the last decade. As shown in Table III-5, 53% of the vacant units were for rent while 15% were for sale. In effect, the homeowner vacancy rate was negligible at 0.2% while the rental vacancy rate was 5%. Another 31 vacant units in the study area were classified as seasonal or other vacancies and accounted for 1.5% of the housing supply in the census tract. Approximately 2,180 units were classified as vacant in the City of Quincy, an increase of 970 vacant units since 2000 and representing 35% of the net change in housing over the last decade. Approximately 52% of the vacant units were for rent and 12% were for sale. The homeowner vacancy rate was 1.1% and the rental vacancy rate was 4.9% in Another 35% of the vacant units were classified as seasonal or other, and accounted for almost 2% of the housing stock. In Norfolk County, 12,455 units were vacant according to US Census and 43% were for rent while 21% were for sale. The homeowner vacancy rate was 1.1% while the rental vacancy rate was almost 6%. Another 36% of the vacant units were classified as seasonal or other vacant units and represented approximately 1.6% of the housing stock, as in Table III-5. RKG Associates, Inc. Page 14

18 Table III-5 Quincy and Comparative Areas: Vacant Unit by Type CENSUS TRACT # % Total housing units 2,143 2,102 (41) 1.9% 100% 100% Vacant housing units % 1.4% 4.5% For rent % 0.1% 2.2% Rented, not occupied % 0.0% 0.1% For sale only % 0.1% 0.1% Sold, not occupied % 0.0% 0.6% For seasonal use % 0.3% 0.5% All other vacants % 0.8% 1.0% Overall Vacancy Rate 1.4% 4.5% 3.1% Homeowner Rate 0.3% 0.2% 0.1% Rental Rate 0.4% 5.0% 4.6% QUINCY, MA # % Total Housing Units 40,093 42,838 2, % 100% 100% Vacant housing units 1,210 2, % 3.0% 5.1% For rent 552 1, % 1.4% 2.6% Rented, not occupied (16) 25% 0.2% 0.1% For sale only % 0.2% 0.5% Sold, not occupied % 0.1% 0.1% For seasonal use % 0.5% 0.7% All other vacants % 0.7% 1.1% Overall Vacancy Rate 3.0% 5.1% 2.1% Homeowner Rate 0.7% 1.1% 0.4% Rental Rate 3.0% 4.9% 1.9% NORFOLK COUNTY # % Total Housing Units 255, ,359 15, % 100% 100% Vacant housing units 6,327 12,445 6,118 97% 2.5% 4.6% For rent 1,974 5,020 3, % 0.8% 1.9% Rented, not occupied % 0.1% 0.1% For sale only 772 1,993 1, % 0.3% 0.7% Sold, not occupied % 0.2% 0.2% For seasonal use 1,161 1, % 0.5% 0.6% All other vacants 1,670 2,803 1, % 0.7% 1.0% Overall Vacancy Rate 2.5% 4.6% 2.1% Homeowner Rate 0.7% 1.1% 0.4% Rental Rate 2.8% 5.9% 3.1% Source: US Census & RKG Associates, Inc. 4. Conclusions The housing supply in the Wollaston Station study area declined by 2% over the last decade while citywide the housing supply increased by nearly 7%. Occupancy, however, did not keep pace with new construction and as a result the vacancy rate increased to 5% citywide and 4.5% in the Wollaston Station study area. The study area and the City of Quincy experienced an influx of Asian households over the last decade and in 2010 they accounted for 22% and 17% of total households, respectively. In fact, Quincy captured about 43% of the increase in Asian households in Norfolk County over the last decade. Housing production totaled about 2,200 new units over the last decade, and averaged about 220 units per year. However, most the activity occurred in the early part of the decade. Approximately 95% of the new development was in multi-unit structures including large apartment and condominium projects. B. Owner Household Characteristics and Trends This section identifies trends and characteristics of owner households in the City of Quincy and the Wollaston Station study area. Age, household size, income and mobility are RKG Associates, Inc. Page 15

19 examined from a review of decennial census data. This is followed by an analysis of market activity of for-sale housing in Quincy. 1. Owner Age Characteristics Over the last decade, growth in owner households in the Wollaston Station study area occurred only in the age 55-to-64 group while declines occurred in all other cohorts, with the elderly households (age 65 and up) experiencing the largest decline, as shown in Table III-6. Similarly, elderly owner households experienced the largest decline citywide, followed by those in the 35-to-44 group. These declines were offset by gains in owners in the two cohorts of the baby-boom generation, especially those in the 55-to-64 cohort. Table III-6 Wollaston Station & Quincy: Owner Households by Age CENSUS TRACT # % Total Households 2,112 2,007 (105) 5.0% 100% 100% Owner Households 1,151 1,110 (41) 3.6% 54.5% 55.3% less than 25 yrs 10 9 (1) 10.0% 0.5% 0.4% 25 to 34 yrs (36) 27.7% 6.2% 4.7% 35 to 44 yrs (13) 5.8% 10.6% 10.5% 45 to 54 yrs (12) 4.3% 13.3% 13.4% 55 to 64 yrs % 7.0% 11.7% 65 yrs (66) 18.3% 17.1% 14.7% QUINCY, MA # % Total Households 38,883 40,658 1, % 100% 100% Owner Households 19,081 19, % 49.1% 48.0% less than 25 yrs % 0.3% 0.4% 25 to 34 yrs 2,114 2,109 (5) 0.2% 5.4% 5.3% 35 to 44 yrs 3,774 3,441 (333) 8.8% 9.7% 8.6% 45 to 54 yrs 4,296 4, % 11.0% 11.5% 55 to 64 yrs 3,071 4,161 1, % 7.9% 10.4% 65 yrs + 5,694 5,018 (676) 11.9% 14.6% 12.6% Source: US Census & RKG Associates, Inc. Referring to Table III-6, nearly 15% of the households in the Wollaston Station study area were elderly owners in 2010 while citywide elderly owners represented barely 13% of total households. Baby-boom owners in the Wollaston Station study area accounted for nearly 25% of total households as compared to 22% citywide. Young family owner households (age 35-to-44) represented a slightly higher distribution in the study area (10.5%) than citywide (8.6%). Younger owner households in the two cohorts less than age 35 represented 5% of total households while citywide they accounted for only 6% of the total. 2. Owner Household Size and Number of Bedroom Characteristics The average size of owner households in the Wollaston Station study area was 2.72 persons in 2010, and was 4% smaller than in In comparison, the average size of owner households in the City of Quincy was 2.57 in 2010 or 5.5% smaller than in the study area. RKG Associates, Inc. Page 16

20 Table III-7 Wollaston Station & Quincy: Owner Households by Size CENSUS TRACT # % Total Households 2,112 2,007 (105) 5.0% 100% 100% Owner Household 1,151 1,110 (41) 3.6% 54.5% 55.3% 1 person % 11.6% 13.8% 2 person (54) 14.0% 18.3% 16.6% 3 person (6) 3.2% 9.0% 9.2% 4 person % 7.0% 8.2% 5 + person (27) 15.0% 8.5% 7.6% AVG H'hold Size (0.1) 4.4% QUINCY, MA # % Total Households 38,883 40,658 1, % 100% 100% Owner Household 19,081 19, % 49.1% 48.0% 1 person 5,241 5, % 13.5% 13.3% 2 person 5,881 6, % 15.1% 15.2% 3 person 3,332 3,152 (180) 5.4% 8.6% 7.8% 4 person 2,513 2, % 6.5% 6.5% 5 + person 2,114 2, % 5.4% 5.3% AVG H'hold Size (0.1) 3.7% Source: US Census & RKG Associates, Inc. Table III-8 Wollaston Station & Quincy: Owner Households by Bedrooms CENSUS TRACT # % Total Households 2,112 2,007 (105) 5.0% 100% 100% Owner Household 1,151 1,110 (41) 3.6% 54.5% 55.3% No bedroom N/A 0.0% 0.0% 1 bedroom (97) 72% 6.4% 1.9% 2 bedrooms % 15.1% 16.1% 3 bedrooms (76) 17% 21.6% 18.9% 4 + bedrooms % 11.5% 18.4% QUINCY, MA # % Total Households 38,883 40,658 1, % 100% 100% Owner Household 19,081 19, % 49.1% 48.0% No bedroom % 0.5% 0.5% 1 bedroom 1,486 1,100 (386) 26% 3.8% 2.7% 2 bedrooms 5,805 6, % 14.9% 15.1% 3 bedrooms 7,756 7, % 19.9% 19.2% 4 + bedrooms 3,858 4, % 9.9% 10.4% Source : RKG Associates, Inc., US Census Bureau and American Community Survey As shown in Table III-7, the study area experienced an increase in one-person and 4-person owner households that were offset by declines in the other household sizes. However, citywide 61% of the increase in owner households was attributed to one and two-person households. In 2010, one and two-person owner households accounted for 29% of total households in the City and 30% in the study area. According to the data in Table III-8, owner households in 1-bedroom units or less in the study area represented about 2% of total households, which is considerably less than the percentage of one-person owner households (14%). Owners in 2-bedroom units in the study area represented 16% of total households which is fairly similar to the percentage of twoperson owner households (17%). RKG Associates, Inc. Page 17